Heartland Express Inc (HTLD)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-20,504	-36,266	-36,549	-27,482	9,909	46,484	88,927	104,062	103,229	107,814	105,989	110,172	101,678	92,701	80,865	75,081	78,589	71,714	64,240	63,986
Interest expense (ttm)	US$ in thousands	17,582	20,053	21,877	23,414	24,187	24,288	20,566	14,629	8,700	2,812	648	649	641	632	622	604	843	1,305	1,586	1,881
Interest coverage		-1.17	-1.81	-1.67	-1.17	0.41	1.91	4.32	7.11	11.87	38.34	163.56	169.76	158.62	146.68	130.01	124.31	93.23	54.95	40.50	34.02

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-20,504K ÷ $17,582K
= -1.17

Heartland Express Inc has shown a generally strong trend in its interest coverage ratio over the past few years, indicating its ability to comfortably meet its interest obligations. The interest coverage ratio has improved steadily from 34.02 in March 2020 to a peak of 169.76 in March 2022, reflecting an increasing ability to cover interest expenses with operating profits.

However, starting from June 2022, there has been a decline in the interest coverage ratio, dropping to 11.87 by December 2022. This significant decrease may raise concerns as it suggests a potential strain on the company's ability to cover interest payments with its earnings.

The trend further deteriorates in the following periods, with the interest coverage ratio falling into negative territory by March 2024. Negative interest coverage ratios indicate that a company's operating income is insufficient to cover its interest expenses, raising serious concerns about its financial health and ability to service its debt obligations.

Overall, the declining trend in Heartland Express Inc's interest coverage ratio in recent periods suggests a potential strain on its ability to cover interest expenses with operating profits, indicating a need for careful monitoring and potential action to address the situation.